Wednesday, December 23, 2009

PRC Tort Liability Law Comming to Save the Environment


The National People's congress is still working on the draft of the PRC Tort Liability Law - which is an essential law that should be introduced to China's Civil Code. Currently tort related provisions are found in laws such as (1) the PRC Civil Law, (2) the PRC Law on Protection of Consumer Rights and Interests, (3) the Environmental Protection Law, etc., but there is no unified set of rules yet.

The draft law is similar in sense to Western tort legislation in that it outlines rules for fault and non-fault tort liabilities. The draft is quite comprehensive and covers issues regarding medical torts, accidents, product liability, environment, etc.

There is a special section titled "Environmental Tort Liability" which is an especially important piece of legislation at this time.

The draft states that Persons who pollute the environment and cause damage shall bear tort liability. This is a major change from previous environmental tort provisions under PRC law, because under existing legislation persons bear liability if they violate environmental laws/regulations, and if such laws were not violated then the person would be exempt from tort liability. The scope of liability under the draft law has been considerably broadened. That means that even people complying with environmental laws could be held liable if they do pollute and damage the environment! Good news.

Burden of Proof rests on the person suspected of pollution in proving their is no causal link between their actions and the damages. Furthermore if more than one person/party is involved, then comparative fault will be used looking at the type of pollutants and the amount involved.

The draft also creates joint liability between creators of pollution and third parties who actually cause the damage. This is a signal for corporations not only to clean up their acts, but also to better manage and oversea third parties who are in charge of clean up and disposal, or otherwise face serious consequences.

It is nice to see the Chinese legislatures handling the matter of environmental pollution seriously. What remains to be seen is how much of a deterrent effect the actual penalties will have...